Rate wars, first home buyer wins, and broker backing - inside Westpac's half-year performance
Westpac New Zealand has reported a net profit of $525 million for the six months to 31 March 2025, up 10% on the same period last year.
The result was supported by an 8% rise in operating income, though partly offset by a 6% lift in expenses due to higher investment in technology, staff, and customer protections. The bank also noted a 9% dip in profit compared to the previous six-month period, largely due to increased impairments and operating costs.
Home lending grew by a modest 3% to $69.5 billion in what Westpac described as a “highly competitive environment.”
“Competition for home lending is fierce, with banks undercutting each other on their advertised rates often several times a week, and RBNZ data showing near-record levels of mortgage switching,” a Westpac NZ spokesperson told NZ Adviser.
“We were the first bank in this cycle to offer a sub-5% rate with a 4.99% 3-year special offering in February and we’ll continue to look for opportunities to provide good value.”
Supporting growth in business and first home lending
Westpac NZ reported corporate and small business lending grew faster than the market in the six months to March, building on strong momentum from the previous financial year.
CEO Catherine McGrath highlighted the bank’s focus on helping small and medium enterprises (SMEs) drive economic recovery.
“We need small and medium businesses thriving to help build economic momentum and we have a real focus to support them,” she said. “We’ve cut some variable business lending rates by 2.10% since last July – more than the 2.00% the OCR has fallen in that time – to encourage them to invest and grow.”
Agribusiness support has also been a priority. Westpac estimates that farmers and growers are saving an average of $46,500 per year in interest costs as a result of falling rates. In response to ongoing cost pressures like on-farm inflation, the bank’s Agri bankers boosted their proactive outreach by 12% over the past year.
On the residential side, Westpac helped 3,463 first home buyers purchase a property in the six-month period—up 12% from the same time last year. The bank also directed $334 million in new lending towards social and affordable housing developments.
Investing in improvements and strengthening the adviser channel
Although profit was up year-on-year, Westpac’s bottom line was down 9% compared to the second half of 2024. This reflects rising operating costs, which grew 6% due to investment in new technologies, digital platforms, and fraud protection.
That said, the bank isn’t backing off from future investment.
“We don’t know where operating costs will land in six months' time, but we’ll continue to balance strong investment in staff, digital capability and fraud and scam protections against the need for a disciplined approach to costs,” the Westpac NZ spokesperson said.
New developments include enabling more customers to re-fix their home loans online, and extending the bank’s Greater Choices interest-free loan to cover various upgrades. Westpac is also piloting a “basic” bank account aimed at customers who may have been excluded from traditional banking services, part of a broader effort to improve access and financial inclusion.
For mortgage advisers, Westpac’s commitment to the third-party channel remains strong. Westpac said that advisers are a key part of the bank’s strategy to support homebuyers, particularly those entering the market for the first time.
“Mortgage advisors play an important role in helping provide our customers with guidance and expertise through the homebuying process,” Westpac NZ’s spokesperson said.
“We believe we’re well placed to support Kiwis with their homebuying aspirations, including the widest range of low-deposit options for first home buyers.”
